Sam Morgan lifts stake in Xero

Friday 23rd July 2010

Sam Morgan, the cashed-up founder of the TradeMe auction site, has increased his holding in Xero to 4.86% after buying shares from the online accounting firm’s founders.

Morgan agreed to buy about 1.4 million shares at $1.45 apiece from Rod Drury, Hamish Edwards and chief operating officer Alastair Grigg, chairman Phil Norman told shareholders at their annual meeting yesterday.

Drury and Edwards won’t sell any more shares until Xero breaks even, Norman said. The company’s shares rose 0.7% to $1.41 yesterday and have slipped about 13% this year. At that price, Morgan’s investment is valued at $6 million.

Xero’s EBIT loss widened to $9.5 million in the 12 months ended March 31 from a loss of $7.2 million a year earlier.

In the same period, sales rose to about $3.4 million from $1.1 million. The company had cash of about $21 million at March 31 and chief executive Drury told shareholders it “continues to focus on cash preservation whilst ensuring the growth path continues.”

It raised $29 million in May 2009 via a share placement and share purchase plan. The company expects to break-even on UK direct sales at the end of this year and in Australia in the first three months of 2011. It expects to move out of the red in the second half of next year.

Xero has 22,000 paying customers.

Businesswire.co.nz

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